Will Salary History Questions Soon Be History?

Date: January 03, 2018

Starting January 1st, entities contracting with New York State are required to submit extensive workforce and compensation data on a quarterly basis. The mandate means more onerous compliance burdens for business and is one of many measures that reportedly aim to address perceived pay disparities.  Read Executive Order 162

Similarly, in an effort to promote pay equity, many states and localities have banned or are considering prohibiting the common hiring practice of asking candidates about prior compensation. New York City’s ban on salary history questions took effect October 31, 2017, and the state legislature advanced a proposal at the end of the previous legislative session in June.   

The bill would prohibit employers from asking candidates or candidates’ current and former employers for wage or salary information. It also would establish significant penalties for employers that improperly inquire about or rely on salary history. In addition to being subject to civil litigation, employers could be fined by the Department of Labor for up to $10,000 in damages per each employee or prospective employee for violations.

Although NFIB/NY supports equal pay for equal work principles, this bill is flawed for several reasons. First, it ignores the fact that employers may have legitimate reasons for inquiring about salary history that have nothing to do with discrimination. Employers may ask prior compensation questions in order to better understand the market and be competitive in attracting talent. Questions about salary history also allow employers to gauge how likely a candidate will be to accept an offer.  

Adding new mandates and subjecting employers to litigation also is unnecessary given current state and federal laws that provide adequate protection for employees and job applicants. The New York State Equal Pay Act prohibits pay discrimination based on age, race, gender, sex etc. The Civil Rights Act similarly already provides adequate remedies for sex discrimination in employment, including any claim that equal pay is being denied based on gender or race.

Finally, the proposed legislation does not actually address the perceived pay gap or improve the economic conditions in the state. NFIB/NY believes that the best way to help all workers succeed in the workplace is to work to strengthen the economy by passing measures that will help small businesses grow, expand and create jobs.  Instead, this bill sets employers up for disproportionate fines and lawsuits subject to the applicant’s motivations. 

In the upcoming legislative session, NFIB will continue to fight against additional labor mandates, including banning salary history questions. Keep an eye out for our complete legislative agenda to be released later this month.

Additional resources for New York City employers:
Best practices for compliance with salary history bans
New York City Salary History Ban FAQs

Related Content: Small Business News | Labor | New York

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